It canceled its annual Super Bowl advertising. It diverted tens of millions of dollars from traditional advertising to create the “Pepsi Refresh Project.”Pepsi Refresh was an online social media initiative in which Pepsi gave out 20 million dollars. They also spent many millions more in support of this initiative.

Last week, The Wall Street Journal reported that Pepsi-Cola and Diet Pepsi had each lost about 5% of their market share in the past year.

If my calculations are correct, for the Pepsi-Cola brand alone this represents a loss of over $350 million. For both brands, the loss is probably something in the neighborhood of 400 million to half-a-billion dollars.

For the first time ever Pepsi-Cola has dropped from its traditional position as the number two soft drink in America to number three (behind Diet Coke.)

In 2010, Pepsi’s market share erosion accelerated by 8 times compared to the previous year.